SACRAMENTO, CA-Amstar Group LLC recently acquired North Point Corporate Center, a four-story, 133,000-sf office building in the tight Watt Avenue submarket near downtown Sacramento. The purchase price was $23.8 million, which translates to approximately $179 per sf

.The building is located at the intersection of Interstate 80 and the Capital City Freeway, two of the busiest highways in the Sacramento region, and is adjacent to a light rail station. For the past five years, the Watt Avenue submarket vacancy has remained below 9%, and currently stands at 5.7%. North Point Corporate Center is currently 10% vacant.

The building was constructed in 1988 for the Internal Revenue Service, which still occupies 92,000 sf, approximately 70% of the building on a short-term lease. Maric College occupies the remainder of the leased space in the building, approximately 25,000 sf.

Amstar acquired the property from G REIT, a public, non-traded REIT sponsored by Santa Ana, CA-based Triple Net Properties LLC. In a recent SEC filing, G REIT stated that the IRS lease was to expire in mid-August but was extended for 24 months, save for the IRS’ right to cancel after 12 months. The annual base rent is $2.49 million, which equates to approximately $27 per sf.

“The North Pointe Corporate Center was originally constructed as a build-to-suit for the IRS in 1988. The property occupies a strategic stand-alone position near major freeways which makes it competitive with buildings in other Sacramento submarkets, including Highway 50 Corridor, Folsom, and even downtown Sacramento,” said Gibler. “The property is currently 90 percent leased with the IRS and Maric College.”

Amstar executive director Scott Gibler says capital upgrades and improvements are underway that will enhance the presence and marketability of the property. Jones Lang LaSalle has been selected to lead the management and leasing functions of the building. “This building fits nicely within our value-add acquisition strategy,” says Amstar CEO Gabe Finke.

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